AM Best upgrades credit ratings of Triple-S Propiedad
AM Best, the credit rating company, has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb” (Good) for Puerto Rico insurer Triple-S Propiedad Inc. The outlook for these ratings is stable.
The ratings reflect the company’s balance sheet strength, which AM Best categorizes as very strong, along with its adequate operating performance, limited business profile and marginal enterprise risk management (ERM), AM Best stated in its review.
Triple-S Propiedad Inc.’s balance sheet strength is supported by its highest level of risk-adjusted capitalization, according to Best’s Capital Adequacy Ratio, despite a significant decrease in policyholder surplus through the third quarter of 2023.
“The deterioration was driven by material reserve development related to Hurricane María claims. As a result of this, the ultimate parent, GuideWell Mutual Holding Corporation, implemented a capital management strategy that included a capital contribution, a loss portfolio transfer (LPT) and overall support of Triple-S Propiedad Inc.’s ERM program,” AM Best stated.
AM Best considers Triple-S Propiedad’s operating performance as adequate, noting historically profitable results, except for 2018 and 2023, which were impacted by adverse reserve development from Hurricane María claims, leading to significantly higher combined ratios in those years compared to 2019-2022.
“Triple-S Propiedad Inc.’s business profile is viewed as limited due to its geographic concentration of risk in Puerto Rico. The company’s ERM is marginal given the weakness observed despite strengthening efforts implemented in previous years,” AM Best stated.
The rating upgrade results from GuideWell’s commitment to supporting Triple-S Propiedad, as demonstrated with the most recent capital contribution and the LPT completed in 2023, it stated.
